Core Insights - Philip Morris International Inc. (PM) is expected to report growth in both revenue and earnings for the fourth quarter of 2024, with revenue estimates at $9.36 billion, reflecting a 3.5% increase year-over-year [1] - The earnings consensus has slightly decreased to $1.51 per share, indicating an 11% increase from the previous year's quarter [2] Revenue Growth Drivers - The company's ability to implement strong pricing strategies has significantly contributed to revenue and operating income growth, as smokers tend to accept price increases due to the addictive nature of cigarettes [3] - Smoke-free products have become a substantial revenue source, accounting for 38% of net revenues in Q3 2024, driven by the success of the IQOS device [4] - Smoke-free product revenues are projected to grow organically by double digits, nearing $15 billion in 2024 [4] Financial Performance Expectations - The Zacks Consensus Estimate for smoke-free product revenues in Q4 is $3,867 million, up from $3,489 million in the same quarter last year [5] - Cost-saving measures and strategic initiatives are positively impacting the company's margins [5] Currency and Regulatory Challenges - Currency fluctuations have posed challenges, particularly with the Egyptian Pound and Argentine Peso, leading to an anticipated unfavorable currency impact of 40 cents for the full year [6] - Strict government regulations, including mandatory precautionary labels and self-critical advertisements, are also affecting cigarette consumption [6] Earnings Prediction Insights - Current models do not predict a definitive earnings beat for Philip Morris, as it holds a Zacks Rank of 3 and an Earnings ESP of -0.61% [7]

Core Viewpoint - The market anticipates Philip Morris (PM) will report a year-over-year increase in earnings driven by higher revenues for the quarter ended December 2024, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The consensus EPS estimate for Philip Morris is $1.51 per share, reflecting an 11% increase year-over-year, while revenues are projected at $9.36 billion, a 3.5% increase from the previous year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised down by 2.03%, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Philip Morris is lower than the consensus estimate, resulting in an Earnings ESP of -0.61%, complicating predictions for an earnings beat [10][11]. Historical Performance - In the last reported quarter, Philip Morris exceeded the expected earnings of $1.83 per share by delivering $1.91, resulting in a surprise of +4.37%. Over the last four quarters, the company has beaten consensus EPS estimates three times [12][13]. Market Reaction Factors - An earnings beat or miss may not solely dictate stock price movement, as other factors can influence investor sentiment. Stocks may decline despite an earnings beat or rise despite a miss [14][16]. Investment Considerations - While Philip Morris does not currently appear to be a strong candidate for an earnings beat, investors should consider other factors before making investment decisions [16].

Core Insights - Zyn, a nicotine pouch brand, has rapidly gained popularity in the U.S., benefiting Philip Morris International amid a long-term decline in cigarette smoking [1][3] - The FDA has authorized 20 Zyn products for marketing in the U.S., citing lower health risks compared to traditional cigarettes and most smokeless tobacco products [2] - Zyn's growth aligns with Philip Morris's strategy to shift towards smokeless products, aiming for two-thirds of revenue to come from smoke-free sources by 2030 [4] Company Developments - In 2022, Philip Morris International acquired Swedish Match, the manufacturer of Zyn, for $16 billion [2] - Zyn shipped 238 million cans in the U.S. in 2022, with projections indicating that this number will more than double in 2024 [3] - Philip Morris announced a $600 million investment to build a new Zyn production facility in Aurora, Colorado, followed by an additional $232 million investment to expand production in Owensboro, Kentucky [5]

Core Viewpoint - The current stock market is heavily focused on artificial intelligence, semiconductors, and cryptocurrency, suggesting a need for diversification in investment portfolios [1] Company Overview - Philip Morris International (PM) is a global leader in the nicotine market, with a dividend yield exceeding 4% and a strong balance sheet, positioning it for double-digit earnings per share (EPS) growth in the future [3][10] Market Position - Philip Morris International has a diverse portfolio of cigarette brands, including Marlboro and Chesterfield, and operates in nearly every country except China and the U.S. [4] - The company experienced a 1.3% year-over-year growth in cigarette volumes last quarter, contrasting with Altria Group's 8.6% decline [5] New Product Development - The company has invested significantly in the new-age nicotine market, acquiring leading products like the IQOS heat-not-burn device and Zyn nicotine pouches [6] - Smoke-free revenue grew by 16.8% year-over-year, now accounting for 38% of total revenue, indicating a strong growth trajectory for these products [7] Revenue Growth - Overall revenue for Philip Morris International increased by 11% year-over-year, despite a supply shortage of Zyn nicotine pouches, which affected market share [8] - Management anticipates that resolving the Zyn supply shortage will lead to accelerated revenue growth [9] Dividend and Cash Flow - The company currently pays a dividend of $5.25 per share, supported by $6.46 in free cash flow per share, indicating sustainable dividend growth potential [10] - Expectations for increasing free cash flow suggest that the company will have more capacity to raise dividends in the future, enhancing investor income [11] Investment Recommendation - With a strong market position in safer nicotine products and a solid dividend yield, Philip Morris International is recommended as a long-term investment during the transition from traditional cigarettes [12]

Investment Rating - The report assigns a "Buy" rating with a target price of $150.00, indicating a potential upside of 23.4% from the current price of $121.59 [4][5][139]. Core Insights - Philip Morris International (PMI) is transitioning towards a "smoke-free future" with a strong focus on reduced-risk products (RRPs) such as heated tobacco and nicotine pouches, which are expected to drive future growth [2][3][137]. - The company's flagship heated tobacco product, IQOS, has established a dominant market position globally, particularly in Japan and Europe, and is set to expand further into the U.S. market [2][3][137]. - PMI's revenue from RRPs has significantly increased, contributing approximately 35.6% to total revenue as of 2023, with expectations for continued growth [25][133][138]. Summary by Sections Company Overview - PMI is a leading global tobacco company with a strong market presence in approximately 175 countries, primarily known for its Marlboro brand [1][8]. - The company has shifted its strategy to focus on low-risk products in response to declining smoking rates and increasing health awareness [7][9]. Financial Performance - PMI's revenue for 2022 was $31.76 billion, with projections for 2024-2026 showing growth to $37.86 billion, $40.38 billion, and $43.08 billion respectively [6][141]. - The company reported a net profit of $9.05 billion in 2022, with forecasts indicating growth to $9.83 billion in 2024 and $11.61 billion by 2026 [6][141]. Product Development - PMI has successfully diversified its product portfolio to include a range of non-combustible products, with heated tobacco products and nicotine pouches gaining significant traction [3][25][138]. - The acquisition of Swedish Match and its ZYN brand has positioned PMI as a leader in the nicotine pouch market, with ZYN's sales volume increasing by 55.8% year-over-year [3][138][129]. Market Position - PMI holds a leading market share in the global tobacco industry, with a 28.3% share in the heated tobacco segment and a strong presence in both traditional and emerging markets [15][12]. - The company's IQOS brand commands a 71% market share in the heated tobacco category, reinforcing its competitive advantage [72][72]. Future Outlook - The report anticipates continued growth in PMI's RRP segment, particularly in the U.S. market, following the resolution of legal disputes and the expansion of its product offerings [137][138]. - PMI's commitment to innovation and market expansion is expected to enhance its revenue streams and shareholder returns in the coming years [138][139].

Core Insights - Philip Morris International Inc. is making significant progress towards a smoke-free future, supported by a strong pricing strategy, innovative smoke-free products, and disciplined cost-saving measures [1] Pricing Power Driving PM's Performance - The company's strong pricing power has been a crucial factor in driving revenue and operating income growth, with net revenues reaching $9,911 million, an increase of 8.4% on a reported basis and 11.6% on an organic basis in Q3 2024 [2] - The growth in organic revenues was primarily due to positive pricing variance and favorable volume/mix, particularly from increased smoke-free product volumes [2] PM's Smoke-Free Transformation in Full Swing - Smoke-free products accounted for 38% of the company's net revenues in Q3 2024, highlighting the success of the IQOS heat-not-burn device [3] - The company aims to generate over two-thirds of its revenues from smoke-free products by 2030 [3] Strategic Initiatives and Partnerships - Philip Morris became the majority owner of Swedish Match on November 11, 2022, which has performed well due to its ZYN product [4] - A long-term partnership with KT&G was established on January 30, 2023, to commercialize innovative smoke-free devices outside South Korea [4] - Smoke-free revenues for 2024 are projected to increase by double digits organically, nearing $15 billion [4] Focus on Cost-Saving Initiatives - The company has implemented significant cost-saving measures, achieving an organic adjusted operating margin expansion of 90 basis points in Q3 2024, driven by an 80-basis-point increase in gross margin [5] - Cumulative gross cost efficiencies reached $490 million year-to-date, with a target of $2 billion in savings by 2026 [5] Currency and Regulatory Challenges - Philip Morris' Q3 2024 performance was impacted by currency fluctuations, particularly with the Egyptian Pound and Argentine Peso, leading to a 6-cent currency impact on adjusted diluted EPS [6] - The company anticipates an ongoing unfavorable currency impact of 40 cents for the full year, alongside challenges from strict government regulations [6] Final Thoughts on PM Stock - The company's strong fundamentals and commitment to innovation position it well for sustained growth, despite challenges from regulatory restrictions and currency headwinds [7] - Philip Morris shares have increased by 11.7% over the past six months, outperforming the industry growth of 10.5% [8]

Group 1: Exxon Mobil - Exxon Mobil is a global leader in energy, benefiting from steady demand and robust cash flow, even in uncertain markets [2] - The company offers a strong dividend yield of 3.8%, providing an attractive income stream [2] - Currently, Exxon Mobil trades at 13.3x forward earnings, which is below its 10-year median of 17.7x [11] Group 2: Philip Morris International - Philip Morris is recognized as a consumer staple, with consistent demand for its products [3] - The company has a generous dividend yield of 4.4% and is trading at 19.1x forward earnings, slightly above its 10-year median of 16.5x [7] - Philip Morris's transition to smokeless products has reignited its growth trajectory, with EPS projected to increase by 8.3% this year and 10.6% next year [7] Group 3: AT&T - AT&T combines a reliable telecommunications business with a generous dividend yield of 4.9%, making it a strong defensive play [8] - The stock has recently reached new record highs after nearly seven years of zero stock appreciation [8] - AT&T is trading at a one-year forward earnings multiple of 10.4x, just above its 10-year median of 9.4x [9] Group 4: Market Context - The current market environment shows signs of increased volatility, prompting investors to consider more defensive stocks [4][10] - The Fed's recent adjustments in interest rate policy expectations have contributed to a rise in market volatility [10] - Despite the volatility, high-yield, steady-performing stocks like Exxon Mobil, Philip Morris, and AT&T can help maintain stability and income [9]

Company Overview - Philip Morris International Inc. is a multinational tobacco company with a market capitalization of $200 billion, making it the largest publicly traded tobacco company globally [2]. Financial Performance - The company offers a dividend yield of over 4%, indicating a strong return for investors [2]. Investment Strategy - The Value Portfolio focuses on building retirement portfolios through a fact-based research strategy, which includes thorough analysis of 10Ks, analyst commentary, market reports, and investor presentations [2].

Core Points - The Ministry of the Interior and Safety in Korea is collaborating with Philip Morris Korea to support households in crisis by including informative messages on product packaging [1][2] - The initiative aims to guide individuals facing social and economic difficulties to the Health and Welfare Counseling Center or local government offices for assistance [2] - This collaboration marks a first in the tobacco industry, following a previous agreement signed in July [2] Product Information - The products that will feature the informative messages include TEREA Purple Wave, TEREA Blue (Heated Tobacco Sticks), Marlboro Gold, and Marlboro Red (Regular Cigarettes) [3] - Starting January next year, the initiative will expand to include all 50 products from Philip Morris Korea [3] - Informative messages are also being broadcasted on digital advertising boards in 1,400 convenience stores nationwide to enhance consumer awareness [3] Statements from Officials - Koo Bon-geun, Head of the Smart Welfare Safety Community Promotion Team, emphasized the importance of publicity in addressing welfare blind spots and indicated plans for further cooperation with various companies [4] - A representative from Philip Morris Korea highlighted the significance of using their products to raise social awareness about crisis households and expressed commitment to supporting those in need [4]

Core Insights - The analysis focuses on Philip Morris International (NYSE: PM) and highlights the broader market's perceived overvaluation while still presenting compelling investment opportunities [1] Company Overview - Philip Morris International is positioned as a long-term investment opportunity, particularly for those seeking safe and growing dividends [1] - The company is part of a market that, despite being overvalued by conventional metrics, still offers potential for risk-adjusted returns [1] Analyst Background - The analyst has a decade of experience in investment banking, specializing in equity and real estate markets, with a focus on identifying long-only investment opportunities [1] - The analyst has a strong background in economics and applied mathematics, which supports their ability to analyze market trends and investment strategies [1] Investment Strategy - The investment strategy emphasizes correlation across asset classes and sectors, aiming to enhance portfolio performance [1] - The analyst's experience includes sourcing over $100 million in commercial real estate investments, indicating a robust understanding of investment dynamics [1]